China’s largest alcohol retail chain, 1919 Group, has announced plans to close approximately 1,500 stores by the end of 2025, marking one of the most dramatic shake-ups in the country's liquor retail sector in years.
The move is part of a bold strategic transformation aimed at shifting the company from a traditional product-based sales model to a modern, experience-driven retail concept that blends food, beverage, and hospitality.
A Break with the Past: “The Era of Price Gaps Is Over”
At a recent company conference, 1919 founder and chairman Yang Lingjiang made clear that the old model of profiting from pricing disparities in famous liquor brands is now obsolete. "The era of profiting from the price gap on famous liquor brands is over," Yang declared, citing a fundamental change in consumer behavior, channel dynamics, and retail strategy.
Yang also said the company would “cut ties decisively” with franchisees who are not aligned with its evolving philosophy. The company cited "major differences in business mindset and values" with some of its current partners, including cases of unauthorized product sourcing and contractual violations. These conflicts have already cost the company over RMB 100 million (USD 13.7 million) in losses due to fraudulent transactions and arbitrage. Legal action has reportedly been taken against offending parties.
From Mass Retail to Lifestyle Experience
The company, founded in 2006 and headquartered in Chengdu, currently operates over 5,000 stores across China. It was an early mover in alcohol e-commerce, famous for its “19-minute delivery” system and digital partnerships, most notably a RMB 2 billion strategic investment by Alibaba in 2018. However, in light of market saturation and shifting consumer expectations, 1919 is now reinventing itself.
A key feature of the new strategy is the transformation of its retail stores into lifestyle hubs. This includes the development of “drinks and dining” venues that blend retail, bars, and casual dining. The company launched its first concept store in 2024 at Chengdu’s Global Center, offering integrated experiences like:
- Buy wine, get a meal
- Bar pricing at supermarket rates
- Free coffee with wine purchases
The store design encourages exploration—starting with product displays and ending in a bar-restaurant zone—reflecting a new consumer journey focused on taste, ambiance, and social experience, rather than just price or convenience.
Rebuilding the Franchise Model with Control and Quality
In parallel, 1919 plans to revamp its franchise system with a tighter “joint management” model. Future partners will be held to stricter standards, including compliance with a closed-loop procurement system, which bans any sourcing outside approved company channels. Any violations, Yang said, will result in immediate termination.
The company intends to launch 50 pilot lifestyle stores in Chengdu and Shanghai by early 2025, further testing and refining the model before wider expansion. While the closures may appear drastic, 1919 is effectively trading quantity for quality, aiming to build a more resilient and differentiated brand in China’s evolving retail ecosystem.
A Reflection of Broader Industry Trends
1919’s shift mirrors a broader structural transformation in China’s alcohol retail market. Sales margins have narrowed, volume has become harder to sustain, and consumer tastes have become more experience-focused. Yang underscored this point: “If you earn 20 yuan per bottle, you only need to sell 10 bottles. But if you earn just 5 yuan, you need to sell 100. It’s now a game of volume and slim margins.”
His blunt assessment sums up the new retail reality: sustainable growth now depends on creativity, differentiation, and consumer engagement, not just inventory and pricing power.
Source: Vino-Joy